Obamacare crumbling before our eyes

It wasn't very long ago that President Obama would jeer at Republicans for the many congressional votes they had taken to amend or repeal his healthcare law. But, much though he loves to jeer — his shameful and unpresidential fit of pique about GOP concerns on terrorists camouflaged as refugees, was a recent example — the president may soon beg them for a few more such votes. Because as its sixth birthday approaches, his health insurance law is in critical condition.

The latest bad Obamacare news came on Thursday, when America's largest insurer had to tell Wall Street that it is losing its shirt by participating in the Obamacare exchanges. In a press release, UnitedHealth Group slashed its earnings outlook, causing its stock to fall by 6 percent in the first few minutes of trading.

The release notes that although the rest of UnitedHealth's business is performing "in line with expectations," its earnings would take a $425 million hit in 2015 and 2016 thanks to "projected losses on individual [Obamacare] exchange-compliant products."

The company may announce next that it is dropping out of the Obamacare exchange business altogether, CEO Stephen Hemsley later explained in a conference call with investors. That would mean that more than half a million Obamacare exchange customers will have to find new health plans.

"We cannot sustain these losses," Hemsley said. "We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself." He added that he saw "no data pointing to improvement" in the exchange market.

UnitedHealth is a big company that can survive this kind of setback, but not every year. And there are other insurers who could not take it even once. Twelve of Obamacare's 23 exchange co-ops have recently folded. Other insurers have abandoned state marketplaces. The consequences of an insurer exodus, however large it ends up being, will be an unpleasant increase in premiums in 2017. That will come on top of the dramatic 2016 rate hikes that were announced in many states this summer.

The root causes of this debacle are deeply troubling — a system so badly conceived and constructed that a company with a proven track record in making money on health insurance loses nearly half a billion dollars.

Obamacare's exchanges held forth the promise of government-subsidized health insurance, for which people cannot be turned down or even charged a bit more based on even expensive pre-existing health conditions. The result is that a disproportionate number of those who hurried to sign up for exchange plans did so because they already needed expensive treatments.

The hope was that as time went on, healthier and younger customers would sign up too. That didn't happen, and now most sensible people have abandoned that pipe dream. Obamacare's exchanges are projected to enroll only half as many people as originally expected.

Middle class customers without major health problems look askance at the high premiums. They may also stop paying for insurance after they realize that their premiums are being kept lower than they would be otherwise by high deductibles and narrow networks. Even the controversial requirement that everyone buy insurance under penalty of law has failed to attract these customers.

As a result, there aren't enough net-payers into the pool to cover the healthcare costs of the others. Insurance companies are begging for a bailout. Although it is not a certainty, the threat of the so-called "death spiral" still remains.

The good news? Repeal looks more politically feasible, more attractive, and even more likely to attract at least some Democratic support every day this goes on. When Obama leaves office, more than half of the 60 Democratic senators who voted for it will have retired or been defeated. The party will have much less invested in defending it against common sense, as it has done now for seven grim years.